The Calandra Report: More Ruby Red, Rabbi + Rising Prices @ True North Gems

Thom Calandra
0 Comments|June 19, 2014

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Nick Houghton of True North Gems is fit with a new hip. His Greenland ruby mine developer is fit with a fresh stock price and rising gemstone prices.

 

Those are two special situations that are working well for the gemologist.

 

Now, I will NOT send the picture our True North Gems CEO sent of his scarred and swollen leg. But I will attach a stock chart for TGX (ticker in Canada).

 

The 55-year-old British jewelery designer is fresh out of hospital and says he is into a "speedy" recovery. Nick is an active sportsman and glad to have the ailing hip replaced.

 

TGX shares are active these days. Mr. Houghton says a ruby auction the other day is helping.

 

"I think the Gemfields ruby auction results announced yesterday -- the average price of $18 per carat for rough stone makes our project look very strong. When we did the pre-feasibility study, we used a figure of $2 per carat as there was no known prices for the material and we did the valuation when the market was depressed," he tells us.

 

This first ruby auction from Gemfields for Mozambique stones sheds a light on a growing audience for colored gemstones. See article.

 

So. Make that three special situations: 1. Healing hip; 2. selling and overextended rabbi; 3. rising ruby prices. Even if they are from Mozambique.

 

Did you say selling rabbi?

 

Our Greenland ruby miner True North Gems (TSX:V.TGX, Stock Forum) is above 12 cents CAD a share. That's approaching the prices that the Australian rabbi (the one with 11 or 12 kids) was getting when he dumped millions of shares on the market a few months ago.

For Nick, based in Vancouver, it is thus far a good trade. He bought in April and paid less than 7 cents. He owns a bunch, as do I.

 

Insider Nicholas John Houghton: shares owned: 2,272,250 Trade date: April 1, 2 Trade total: $46,970 Trade: Acquisition of 754,000 shares at prices between $0.06 and $0.07 per share.

 

That is a special situation for the Birmingham, England, gemology student. He spent his younger years designing jewelry.

 

True North has a 30-year mining license at its southwestern Greenland ruby project. I have seen the gems, in Nick's office. They are Tiffany's quality.

 

In April, when he was watching Rabbi Gutnick's selling drive TGX shares below 10 cents, then 8 cents then 7 cents, he told me -- about making an open market purchase: "Why the hell not!! Everyone is going to profit from this why the heck shouldn’t I?"

 

Here is Nick's letter to shareholders about the matter: http://www.digitaljournal.com/images/djlogo_onblack.gif.

 

A few weeks ago, we alerted our TCR audience to another special TGX situation -- a Denmark bank loan for the project. The loan was reported solely in a Danish language newspaper.

 

Mr. Houghton tells us today | Thursday, "We had a very important and symbolic event with the final ratification and signing of the IBA with the Minister, Mayor of the Municipality, Elder of the village and True North."

 

So what, no celebrities at Aappaluttoq Ruby Deposit, SW Greenland?

 

"This is the first IBA collectively agreed upon by the Government, Municipality, Community and a Mining Company since the ascension to home rule," he says. IBA is an Impact Benefit Agreement.

 

Mr. Houghton says his company will move on finance discussions amongst various entities. He has been looking for lenders and investors in Denmark, Copenhagen. Nick is a member of the TCR family. I own about a half-million True North Gems shares.

 

Part of the urgency here might be that True North has has stockpiled gems ready for processing and sale. I have heard amounts, based on this week's ruby auction of those Mozambique gems, that approach $5 million of revenue for the tiny Canada company.

 

That seems like a lot. I'll take $4 million for the rubies, sapphires and the lot.

 

This is another example of a company that could disrupt the market for the reds.

Please see the chart below.




I first met Nick through Meghan Brown, a Vancouverite who is named this week as the chair of one of Canada's largest investor relations trade groups.

 

Ms. Brown runs public relations and communications for Endeavour Silver (EXK and EDR). She is the new chair of Canadian Investor Relations Institute. CIRI says it has 500 members across Canada.

 

Endeavour Silver has some mo-jo of its own going on. The shares in a silver and gold rally this week are rising 5 percent to 8 percent daily. I am a longtime owner of the Mexico silver producer's shares. Endeavour Silver (TSX:EDR, Stock Forum) is a member of the TCR family. So is True North Gems.

 

Please note: I receive zero compensation from companies for advertising, coverage or new shoes. My income comes from $110 yearly subscriptions to The Calandra Report. I purchase almost always in the open market and rarely take private placements unless the shares and warrants are available to subscribers. We thank media partners CEO.ca, InvestorIntel, Stockhouse and SmallCap Power for their support and potent propagation.

 

 

 

 

 

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